“One investor with whom I met on my [China] trip described a recent situation in which he funded an entrepreneur, only to have that entrepreneur turn around and leave for business school months later. The entrepreneur assured the investor that he would be better situated to make the business a success after the two years of school. The investor had no recourse as his money left the country with the entrepreneur.

“In another instance, an investor backed an entrepreneur in a business that thereafter appeared to be failing. However, a couple years later when the same company started thriving, the entrepreneur informed the investor that it was not the company he had backed. The investor was incredulous. He told the entrepreneur that it was the very same company with the same team and even the same name. The entrepreneur assured the investor that it was, in fact, a different company and that he had not invested in this successful company, his investment was in the previous failed venture. Despite the obvious deception, the investor told me that he again had no legal recourse.

Investors have been playing this game long enough to also know that you can’t anticipate every situation. So they use control to dispose the company towards the investor’s interests in unanticipated situations.

Verify your expectations.

China doesn’t seem to have a legal system that lets investors and entrepreneurs verify their expectations. They have trust, but no verification.

But U.S. investors can trust and verify. And you should do the same—with the same tools investors use: contracts and control.

The Social Network is incredibly well made and motivating. I don’t care about the facts of the matter — they’re irrelevant. Still, this film is a better story about startup life than everything you read in the press put together.